BLBG: Oil Is Steady as Equities Recover After Interest Rate Cuts
By Mark Shenk
Oct. 9 (Bloomberg) -- Crude oil was little changed as stocks rose after central banks from the U.S. to China cut interest rates yesterday to bolster the global economy.
Oil prices fell 12 percent in the previous six days as stocks tumbled on signs the economy is slowing. Iranian Oil Minister Gholamhossein Nozari said that the Organization of Petroleum Exporting Countries may hold an emergency meeting in November to review oil output, state news agency IRNA reported.
``We are taking a breather here after some very volatile days,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``The main driver of the market has been concern that the global economy will contract. There's been a lot of trading on emotion because of the recent headlines.''
Crude oil for November delivery rose 13 cents to $89.08 a barrel at 9:43 a.m. on the New York Mercantile Exchange. Futures touched $86.05 yesterday, the lowest since Dec. 6. Prices, which are up 11 percent from a year ago, have dropped 42 percent from the record $147.27 a barrel reached on July 11.
``We held at important support around $86 yesterday,'' said Tom Bentz, senior energy analyst at BNP Paribas in New York. ``If we are able to break through, prices are going to fall to the lower $80s and maybe the high $70s.''
U.S. stocks rose for the first time in seven days as International Business Machines Corp.'s profit beat estimates and investors speculated market declines were overdone. The Dow Jones Industrial Average rose 159.54, or 1.7 percent, to 9,417.64 at 9:42 a.m. in New York.
OPEC Calls
The OPEC Countries may meet Nov. 18 in Vienna to discuss the effect of the financial crisis on oil markets, according to Libya's top oil official, National Oil Corp. Chairman Shokri Ghanem. The next scheduled meeting of ministers is Dec. 17 in Algeria.
``Some OPEC members would like to cut production, but I think it would be suicide,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``I don't think they will make a cut unless things improve dramatically on the economic front.''
Brent crude oil for November settlement rose 29 cents, or 0.3 percent, to $84.65 a barrel on London's ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
